Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

The words that the noble Lord just said come from the Opposition Benches and do not reflect what we are intending by the Bill, or indeed these particular clauses.

I will first speak to government Amendments 156 to 158 in my name, which are minor but important technical amendments to Schedule 10. Amendment 156 makes a small correction to paragraph 36(6), replacing the phrase “that subsection” with a reference instead to “subsection (3)” of Section 15 of the Gangmasters (Licensing) Act 2004. Amendment 157 ensures that Schedule 1 to the Immigration Act 2016 is repealed following the abolition of the Director of Labour Market Enforcement, and Amendment 158 removes specific reference to paragraphs 9 and 11 of Schedule 3 to the Immigration Act 2016. The purpose of these changes is to ensure that the provision functions as intended and provides legal clarity. They do not alter the policy or substance of the Bill in any way but ensure that the schedule functions as intended.

On Amendment 154 tabled by the noble Lord, Lord Carter, the Government were elected on a manifesto pledge to deliver the plan to make work pay in full. This sets out that the new employment rights enforcement agency would have the power to bring civil proceedings to uphold compliance with employment law. This clause delivers that pledge.

The noble Lord, Lord Carter, referred to the precedent, and yes, the precedent that we are citing is the example of the Equality Act 2006, Sections 28 to 30 of which are the precedent for Clauses 113 to 115. Section 28 of the Equality Act enables the Equality and Human Rights Commission to assist an individual who is or may become party to legal proceedings. Section 30 of the Equality Act, which is the precedent for Clause 113, affords the EHRC the capacity to institute and intervene in legal proceedings, including for breach of EHRC rights, even though it is not a victim.

The noble Lord, Lord Carter, said there was not an example of where the EHRC had taken over a case. However, in the case of MS (Pakistan) v Secretary of State for the Home Department, the EHRC in fact substituted itself once the original appellant withdrew from the proceedings. This was a substitution, with the consent of the Supreme Court, by the EHRC in the same way that the fair work agency could substitute itself in place of a worker without their consent.

The EHRC uses Section 30 strategically to clarify the law and act where there are egregious breaches. We envisage that the fair work agency, rather than the Secretary of State as such, will use this power in Clause 113 similarly. Noble Lords have misrepresented what is intended by this clause. It is intended to address some of the worst employment practices that current regulations do not adequately cover. I agree with the noble Lord, Lord Marks, that there are of course cases where individuals or groups of workers are unable or reluctant to take a case, but that does not necessarily mean that the case should not be taken, because there are wider issues at stake. For example, the fair work agency could use the power to clarify entitlement to holiday pay where enforcement officers do not have enough information to confidently issue a notice of underpayment, or the fair work agency could exercise the power to clarify the employment status of a group of individuals. Currently, employers may misclassify workers as self-employed to get out of giving them the rights that they are entitled to. Without this power, the fair work agency has no ability to challenge such claims.

To give a specific example on the possible application of Clause 113, the Director of Labour Market Enforcement has flagged endemic bad practice in the hand car wash sector. A particular challenge in this sector is misclassification of workers, which stymies HMRC’s efforts to enforce the minimum wage. Currently, if a hand car wash claims that its workers are self-employed, HMRC has no means to test this in the courts. It must go through the full notice of underpayment process and wait for the employer to appeal against the notice of underpayment. This can lead to nugatory work if the appeal is upheld and otherwise delay workers getting their due rights. This is a gap in the existing system of state enforcement, which this power will go some way to remedy.

Just as the current system works, the fair work agency will take a whole-employer approach to enforcement. This has the advantages of a resolution for more workers than individual cases against the employer. But in such circumstances, where the fair work agency may be taking action for hundreds or thousands of workers, it is simply not practical to get consent from every individual concerned. As a strategic approach, this power will be used when acting in workers’ best interests to clarify the law. As with the EHRC’s powers under the Equality Act, the fair work agency will not need the consent of each individual concerned to take on cases. The fair work agency will therefore be able to decide when to seek clear, neutral and authoritative guidance from a tribunal on the application of employment legislation.

As we know, in the worst cases of serious exploitation, workers may be reluctant to give their consent due to fear of retribution from the employer. The noble Lord, Lord Goddard, was quite right to say that there are circumstances in which we have the responsibility to look after the individuals who are suffering at the hands of rogue employers and feel powerless in those circumstances. We know that many migrant workers with legal rights to work in the UK, particularly low- paid workers, are reluctant or unable to enforce their employment rights. These workers have understandable concerns, including fear of retaliation, lack of awareness or language barriers. For legal migrants, employment is their prerogative and, for those workers, there are wider implications in challenging an employer that could bring about repercussions for their employment or potentially impact on their visa. We believe that requiring consent from workers would make it easier for employers to attribute blame to individual employees, and they would suffer as a result.

[Lord Garnier (Con)]

My Lords—

[Baroness Jones of Whitchurch (Lab)]

I am going to carry on. When exercising this power—

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[Noble Lords]

Order.

[Baroness Jones of Whitchurch (Lab)]

My Lords, we have had advice already about what the Companion says on this. The noble Lord has spoken once.

[Lord Garnier (Con)]

That is what the Government say, not the Companion.

[Baroness Jones of Whitchurch (Lab)]

I think that the Companion overrides anything that I have to say.

When exercising this power, the fair work agency will of course act in accordance with the rights under the European Convention on Human Rights, including Article 8, and comply with data protection legislation. In doing so, it must act in accordance with the law and for a legitimate purpose.

The noble Lord, Lord Marks, raised the issue of anonymity. In appropriate cases, the fair work agency will consider applying under Rule 49 of the Employment Tribunal Procedure Rules 2024. Rule 49 allows the tribunal to restrict public disclosure of aspects of the proceedings. That means that workers’ names can be kept from the public domain—

[Lord Garnier (Con)]

My Lords—

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[Baroness Jones of Whitchurch (Lab)]

The point that we were making is that this is about test cases, which, as we know, is a frequent way of clarifying legislation, rather than primary legislation.

The noble Lord, Lord Marks, raised the issue of anonymity. In appropriate cases, the fair work agency will consider applying under Rule 49 of the Employment Tribunal Procedure Rules 2024. Rule 49 allows the tribunal to restrict public disclosure of aspects of the proceedings. That means that workers’ names can be kept from the public domain to protect their anonymity and to protect them from any reporting in the media, where it is necessary to do so in the interest of justice or to protect their convention rights. When deciding whether to give an order, the tribunal must give weight to the principles of open justice and the convention’s right to freedom of expression. The tribunal can do this on its own initiative, or the fair work agency can apply for such an order. The fair work agency must also comply with convention rights and data protection legislation, ensuring appropriate protections for individuals and fairness of proceedings.

I understand noble Lords’ interest in how this power will operate and confirm to the House that the Government will publish guidance on how the fair work agency will exercise this power in practice. We will develop detailed guidance, following deep and extensive engagement with social partners and the fair work agency’s advisory board. It will then be for the fair work agency, acting within this guidance, to determine which cases it brings to the tribunal. That will ensure that this power supports those who play by the rules. This approach enables the fair work agency to protect workers’ rights and to tackle injustice and abuse against legitimate workers.

This clause presents an opportunity to make a genuine difference in tackling the scourge of labour exploitation in the UK. Unchecked labour exploitation is unfair on the individuals who are being exploited. It is unfair on the majority of employers, who want to do right by their staff, and it is unfair on workers who are denied jobs by employers exploiting loopholes. The new power will complement the existing powers of the fair work agency, such as the powers to issue notices of underpayment, while enabling the fair work agency to act where these powers cannot be accessed. The fair work agency will exist to end labour exploitation and create a fair and level playing field for employers and for workers. A fair work agency with any less power to act for these most vulnerable would be an unacceptable failure for workers’ rights.

To the noble Lord, Lord Carter, I remain open to discussing how best to deliver this power and to ensure that it is appropriately safeguarded. However, I reiterate that this power is neither novel nor unprecedented and that it delivers a manifesto commitment. I therefore ask the noble Lord to withdraw Amendment 154.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, I am sorry to get up again, but would the Minister like to say something about adverse costs orders against workers?

[Baroness Jones of Whitchurch (Lab)]

My Lords, when we debated this in Committee, we made it clear that there would not be any cost to workers. The noble Lord, Lord Carter, suggested that the worker would be liable to costs where they had not consented to the Secretary of State taking a case on their behalf. Let me be clear that the worker will not be liable for the costs in these circumstances.

[Lord Carter of Haslemere (CB)]

My Lords, I am grateful for all the powerful interventions we have heard this evening from very eminent speakers indeed, including the noble and learned Lord, Lord Garnier, the noble Lords, Lord Murray and Lord Pannick, and the noble Baronesses, Lady Fox, Lady Neville-Rolfe and Lady Falkner. Some really powerful points have been made around the importance of personal autonomy, the unworkability of the clause in relation to witness summonses and adverse witness results, and a duty to consult, which was a powerful point made by the noble Lord, Lord Pannick.

The noble Lord, Lord Marks, referred to the fact that the worker might not want to bring proceedings and therefore would be happy for the Secretary of State to do so in his or her place. That misses the point, which is that the worker might object to legal proceedings being brought in their name and might not give their consent. That is, for me, fundamental in this whole clause.

I believe that this is legally unprecedented—we can have further discussions about that. I think it is unworkable. I think it is completely unnecessary, given that the Secretary of State can support a worker to defend proceedings themselves. I read the manifesto and all I saw was “make work pay”. Those three words cover a multitude of sins. There was no mention of a power to bring proceedings on behalf of a worker—I read it very carefully. I feel that there has been enough power and passion in this debate to warrant seeking the opinion of the House, which I now do.

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Moved by

[Baroness Jones of Whitchurch]

156: Schedule 10, page 282, line 28, leave out “that subsection” and insert “subsection (3)”
Member’s explanatory statement
This amendment corrects an incorrect cross-reference.

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[Lord Hunt of Wirral (Con)]

My Lords, I do not believe that for a moment.

This has been such an important debate. I thank the noble Earl, Lord Clancarty, the noble Lord, Lord Freyberg, the noble Viscount, Lord Colville of Culross, and my fellow lawyer—not solicitor—the noble Lord, Lord Clement-Jones, for what has certainly been a long-standing advocacy on behalf of freelance workers. As my noble friend Lord Parkinson of Whitley Bay said, with all his experience as a Minister, there is no doubt that freelancers play a vital role in our economy and their interests deserve proper attention.

We on these Benches have also made the case that this issue is likely to become more urgent after the passage of the Bill. We cannot avoid the suspicion that the Bill is going to drive more workers into at least considering turning freelance. Time will tell, but as the noble Lord, Lord Londesborough, pointed out, the number could rise towards 3 million freelance workers.

We are all very grateful indeed to the Minister for organising an important meeting on this subject, because it was most useful. We welcome the Government’s intention to create a freelance champion, announced last month as part of the creative industries sector plan. That may be half a loaf, but it is a welcome enough commitment. We recognise the intent behind the amendment to establish a freelance commissioner, but at the moment, in the light of the assurances given by the Minister, we feel that the Government should have the benefit of the doubt for now, not least because we are not totally persuaded that the creation of another public body is the only solution.

What freelancers certainly need is clarity, simplicity and proportionate support. If the new champion can deliver that, all well and good. But we remain of the opinion, as came across in some of the contributions we had in Committee and just now, that socialists despise the very concept of freelancing. “How dare workers choose to avoid our elaborate structures?”, some of them say. So we will be watching with a very keen eye to see how this proceeds, particularly in the light of the speeches we just heard from the noble Lords, Lord Hendy and Lord Berkeley.

As we salute the expertise of the noble Earl, Lord Clancarty, on the creative arts, I take this opportunity to assure him that if he is unsatisfied that the Government’s measures adequately address the issues that have been raised, we will certainly be on his side. So I encourage him to remain vigilant and to keep the Government’s feet to the fire. In the meantime, we look forward with great interest to what the Minister will say in response to the many questions that have been raised in this debate, in particular about the urgency of this problem.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am very grateful to all noble Lords who have spoken in this debate. We have indeed had a very good debate, which once again has identified the significant contribution that the creative and cultural sector makes to our industries and our lives. The Government share your Lordships’ passion for supporting the creative and cultural sectors, and we previously spelled out in detail the significant work we are already doing in this area.

The creative industries and cultural sectors are a distinct part of the wider UK workforce. They have a significantly higher proportion of self-employed individuals, reflecting the sector’s entrepreneurial and freelance nature, which is one of the points that has been well made this evening. In the latest published data, as of 2023, there were 2.4 million filled jobs in the creative industries and 666,000 filled jobs in the cultural sector. Of these jobs, 49.6% in the cultural sector were self-employed, and 27.9% in the creative industries, compared with 14% of UK jobs overall. This reiterates the point that noble Lords have made about the significance of freelancers in the cultural and creative sectors. This flexibility not only drives innovation but supports the more project-driven nature of the creative industries. However, we also know that freelancers’ creative careers, while offering a more flexible and autonomous way of working, can also be precarious and come with lower job security.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful to the noble Baroness, Lady Bennett, for tabling Amendment 184B.

We recognise that workplace temperatures are changing, especially as the climate changes. We are committed to ensuring that workplaces are safe in the modern world, and we committed in Next Steps to Make Work Pay to look at how to modernise health and safety guidance for extreme temperatures.

The Health and Safety Executive is Britain’s national regulator for workplace health and safety. It is dedicated to protecting people and places, and helping people lead safer and healthier lives. To deliver on our commitment, the HSE is reviewing the approved code of practice for the Workplace (Health, Safety and Welfare) Regulations 1992 to ensure it is fit for purpose for a modern workforce. This includes monitoring emerging evidence around the impact of extreme temperatures on workplaces. The HSE will bring forward detailed proposals on workplace temperature in due course and there will be an opportunity to comment, which I encourage the noble Baroness and others to respond to.

I assure the noble Baroness that the workplace regulations currently require that, during working hours, the temperature in all workplaces inside buildings should be reasonable. All employers must make a suitable assessment of the risk to employees and take action where necessary. This includes assessing the risk from heat stress. The Environment Agency has also issued guidance on how employers can plan for climate change impacts to their sites of work and integrate climate change adaption into their management systems. Nevertheless, I hope this broad scope of work, which is currently under way, provides the noble Baroness with the reassurance that this is a matter that we already recognise as important, and that we are actively taking steps to address the impact of increasing temperatures on health and safety at work.

Before we conclude this group, my noble friends Lord Leong and Lord Katz and I would like to thank your Lordships’ House for the extensive and energetic debates that we have had throughout Report, as well as its continued engagement and scrutiny. Indeed, we have held over 50 engagements with noble Lords since the Bill came here from the other place, excluding the debates here in the Chamber.

This Bill will benefit 15 million people—half of the UK workforce. We were elected with a manifesto commitment to make work pay, and the Bill is a vital step in delivering that commitment. With that, I ask the noble Baroness, Lady Bennett of Manor Castle, to withdraw Amendment 184B.